Existing Home Sales at New Cycle-High

April 21, 2017John Elman

The 4.4% U.S. March existing home sales bounce to a 5.71 million new cycle-high rate beat estimates, following a February drop to a 5.47 (was 5.48) million clip from a 5.69 million prior cycle-high in January, as mild weather provided a spotty winter lift to sales. A 3.6% March median price rise to $236,400 trimmed the seasonal downtrend from the $247,600 all-time high last June, while inventories rose 5.8% in March to a still-lean 1.832 million.

Analysts with Action Economics assume a 5% growth clip for existing home sales in Q2 after rates of 6% in Q1 and a solid 13% in Q4. AE notes sales have adhered to an erratic uptrend since 2010. AE sees existing home sales on track for a 5% growth clip in 2017, following a 3.9% rise in 2016 and a 6.5% rise in 2015, but a 2.9% 2014 post “taper-tantrum” drop.

The firm still expect gross domestic product (GDP) growth of 1.3% in Q1 after a 2.1% rate in Q4. They expect real growth in residential investment of a sturdy 12% in Q1 after a 9.6% Q4 clip, alongside nonresidential investment growth of a restrained 2% in Q1 after a 1.9% Q4 contraction rate. AE expects government purchases growth of 1% in Q1 after a 0.2% Q4 clip, with Q1 weakness in public construction.